NFTs have recently been making lots have headlines, and people have been spending millions of dollars on NFT collectibles of all sorts, from sports trading cards and highlight reels to digital houses, augmented reality sneakers and music. So, for all those who have been confused about what this is, here’s a guide about what NFT’s are, and what all the hype is about.
What is an NFT?
An NFT stands for Non-Fungible Token.
It is a unit of data on a digital ledger called a blockchain, where each NFT can represent a unique digital item, which makes them not interchangeable. NFTs can be anything in a digital form, such as drawings, music, etc, but people are mostly excited about using the tech to sell digital art.
“Non-fungible” means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible and one bitcoin can be traded for another bitcoin, and you’ll have exactly the same thing. This is not the case with an NFT.
What is the difference between an NFT and a Bitcoin?
The main difference between NFTs and Bitcoins is the fact that Bitcoins are limited and fungible (you can trade one Bitcoin with another and both have the same value and price), whereas NFTs are unique, unlimited, and non-fungible (no two artworks are the same). While NFTs can appreciate in value (just like real estate), they cannot be interchanged for another NFT.
What all can be tokenised?
NFTs can tokenise almost anything, such as Gaming items, digital art and music, collectibles, real world assets, virtual assets, etc.
How to buy/sell your own NFT
NFTs are commonly created by uploading files, such as digital artwork, to an auction market. For all those who are interested in buying or selling your own NFT, you can shop for them online through various marketplaces. OpenSea is a big one. It is like an online gallery where you can browse digital art, trading cards and other collectibles.
It works like an auction house, where you offer bids on items and hope you’re the winner, but some listings let you “Buy now” for a set price.
If you want to learn how to buy or sell an NFT, you can follow the instructions given here.
Here is a list of sites that sell NFTs:
How much are NFTs worth?
It is possible for anyone to tokenise their work to see as an NFT at any price. However, according to recent news, people have been spending literally millions of dollars on a NFT.
Recently, Artist Mike Winkelmann, better known as Beeple, sold an NFT piece titled “The First 5000 Days” for $69 million this month in a Christie’s auction. The art was purchased by Vignesh Sundaresan, an Indian-origin software engineer.
On 19 February, an animated Gif of Nyan Cat – a 2011 meme of a flying pop-tart cat – sold for more than $500,000. A few weeks later, musician Grimes sold some of her digital art for more than $6m.
And what is shocking? Even TWEETS can be tokenised and sold. Recently, Twitter’s founder Jack Dorsey promoted an NFT of the first-ever tweet, with bids hitting $2.5m.
But as with crypto-currencies, there are concerns about the environmental impact of maintaining the blockchain.
Can this digital art be copied?
Of course, it can be copied. The image of Beeple’s art, that was sold for a whooping $69 million, has been since copied and shared countless times by people. You can copy a digital file as many times as you want, including the art that’s included with an NFT.
However, the buyer of the NFT owns a “token” that proves they own the “original” work. Think of it as buying an autographed photograph or getting a real one.
NFTs are designed to give you something that can’t be copied: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork).